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The bill for activism: how much does social unrest impact tourism?

Research reveals the cost of public violence and social unrest to tourism revenues may be significant. With more tourists boycotting unstable locations, it is time governments of countries in conflict understand the price of unrest for the industry

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Protestor with face paint in Egypt
A protestor with his face painted the colors of the Egyptian flag in Tahrir Square. Tourism in Egypt has suffered significantly due to ongoing protest and social unrest 

It was a busy year for political activists in 2013. Street protests engulfed Turkey, Brazil, Thailand, Egypt and many other countries – indeed, since the Arab Spring erupted over four years ago, civil unrest has been a constant fixture in the news the world over.

Though protests have died down in Brazil, for the time being at least, the prospect of the World Cup coming to a country fraught with unrest has been enough for Sepp Blatter to urge Brazilian football fans to get off the streets (and into stadiums) come June, to ensure the smooth running of a global event.

“Brazil asked to host the World Cup,” Blatter said, as if to remind Brazilians that FIFA is not the cause of their grievances. Of course, that’s neither here nor there, but the threat of social unrest upsetting a tourism event worth hundreds of billions of dollars was enough to make the president of FIFA quiver in his boots.

A developing problem
It may seem crass to put a price on social unrest, but for the global tourism industry that is a real issue. According to IBISWorld’s Global Tourism market research report, the global tourism industry was worth an estimated $1.4trn in 2013, and the market is growing 2.5 percent per year. Europe and North America continue to dominate in terms of visitors, but increasingly Asia and the Middle East are growing their shares.

“Many developing countries also derive a much higher share of their gross domestic products from tourism receipts than developed countries,” writes Eric Neumeyer, from the LSE, in The Impact of Political Violence on Tourism.

[T]ourists will easily switch to another destination if faced with violence

“Economic theory predicts that tourists consume certain characteristics of a tourist destination rather than a single good,” he writes. “Unless these characteristics are very specific to the country and highly valued, tourists will easily switch to another destination if faced with violence.”

Tourists will always find another destination for their holidays, even if what they were looking for is location-specific. For instance, people keen on visiting the Egyptian pyramids might be dismayed by the prospect of public violence in the streets of Cairo, but they will not be sad for long. In fact, they will only mourn the loss of their holiday for as long as it takes to find another historically exciting destination in a far-flung location where there’s no chance of encountering rubber bullets.

It has long been known that public protests come with a hefty price tag, but because of the sensitive nature of the subject, the costs to the tourism industry are hardly ever mentioned. It has been estimated that the Brazilian tourism industry is worth $11bn, while Turkey makes something in the region of $26bn annually. These are not small figures, and in developing countries like these, whole communities rely on this income. The loss of any of it, for any reason, can be catastrophic for the local population.

The impact of social unrest on local tourism industries 
Turkey, Brazil and Egypt derive large portions of their incomes from tourism, and the latter two in particular have been struggling economically. It would be foolish for these countries to dismiss the huge economic and social contributions tourism brings them. By no means should this be taken as an excuse for the oppression of popular uprisings, but it is important to weigh the economic costs. If anything, determining the financial burden of street violence should serve as encouragement for the peaceful resolution of any conflict.

An anti-government protestor holds a blooded Egyptian flag in Tahrir Square in Cairo
An anti-government protestor holds a blooded Egyptian flag in Tahrir Square in Cairo

In Egypt, where tourism accounts for between five and six percent of the GDP, according to estimates, violence derived from the forceful repression of street protests has been ongoing for much of the past four years. Though the influx of tourists travelling to Egypt has decreased in this time, the worst is yet to come, according to Neumeyer’s research.

“In a dynamic context, we see that the short-term effect is often considerably smaller than the long-term effect,” he wrote. “The long-term effects of human rights violations and the two conflict measures [used for the research] are of similar importance: a substantial increase lowers tourist arrivals by around 27 percent in the long run.”

Violence doesn’t pay
It is important to stress however, that unrest in one, or even a few countries is not enough to affect the revenue of the tourism industry globally. As Neumeyer has pointed out, tourists will simply change their minds and go somewhere else. For the countries involved though, results can be catastrophic. “Those [countries] mildly dependent on tourism receipts are more vulnerable to the impact of political violence,” concludes the LSE research paper.

It does not need to be said that the highest cost of political violence is not measured in dollars, but in lives. By opting for conflict resolution policies that do not involve violent repression, governments can help diminish the impact of social unrest on long-term inflows of visitors and thus protect this vital industry.

Tourism has long since been a vital resource for development, as well as a source of income. Social unrest is a symptom of public dissatisfaction with slow progress, lack of development and inequality in wealth distribution. To remove tourism – and the revenues it generates – from the public debate is nothing short of a mistake.

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